Trading within the price range of $26000, some speculate whether the price of Bitcoin has bottomed out.The price of BTC has re-entered the $26000 range
Trading within the price range of $26000, some speculate whether the price of Bitcoin has bottomed out.
- The price of BTC has re-entered the $26000 range.
- Join us, Gong Chonghao: Chen Peiruan, not Peiruan
- CryptoQuant analyst Dan Lim believes that the market has bottomed out.
According to anonymous CryptoQuant analyst Dan Lim, although variables such as the US economic recession and regulatory actions may affect the cryptocurrency market, the Bitcoin [BTC] market has bottomed out and started a new bull market cycle.
Lim evaluated BTC's expenditure output profit margin (SOPR) for short-term investors. It found that whenever the market of Wang Coin bottoms out and rebounds, its unrealized profit and loss ratio drops below -0.18. This indicates that a considerable number of BTCs were in a loss state before the market bottomed out.
On the contrary, during the peak of a bull market, short-term SOPR indicators "skyrocket". This indicates that this group of BTC holders (investors who have been holding for less than six months) have started distributing tokens. According to Lin:
Recently, not only have short-term investors not been profitable, but from a cyclical perspective, the recent bull market since the bottom in November 2022 has been less than 6 months
Source: CryptoQuant
Is Bitcoin prices about to rebound?
As of the time of publication, Bitcoin traded at $26882.14 after fluctuating for several weeks within the price range of $27000 to $27800. Traders are increasingly concerned that gold prices may fall back to the range of $20000 to $25000.
According to Santiment's data, BTC's prominent position in online discussions indicates that its social dominance has skyrocketed. This is usually a sign of fear for traders, indicating an increased likelihood of a price rebound.
When BTC's price re-entered $27000 during the intraday trading session on May 18th, its social dominance immediately climbed by more than 50%. As of the time of publication, this proportion was 28.34%.
In addition, data from Santiment's trend keyword dashboard shows that the trend keywords of the past 10 hours are related to hardware wallets and security. According to Santiment, when most popular keywords revolve around hardware wallets and security, it is a clear sign of fear in the encryption market.
This echoes the security concerns expressed by traders after the unexpected collapse of the cryptocurrency exchange FTX in November 2022, ultimately marking a market bottom.
How to say indicators
Although the above dataset may suggest a potential price rebound, a key bottom price indicator did not imply the same situation at the time of writing. This is BTC's Network Profit and Loss (NPL) ratio indicator.
This indicator tracks the average profit or loss of all tokens that change addresses on a daily basis to record the period of profit taking or holder surrender on the chain. A decrease in non-performing loans is usually a sign of asset prices bottoming out and rebounding.
According to Santiment, this is because they imply a short-term surrender of "weak hands" and a re entry of "smart money", which is why they coincide with local rebounds and price recovery periods.
There has never been such a decline in the current BTC market.
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